【正文】 ccount the externalities involved. The oute is independent of who has the property rights. 169。 2020 Pearson AddisonWesley Negative Externalities: Pollution Government Actions in a Market with External Costs There are three main methods that the government uses to cope with external costs: ? Taxes ? Emission charges ? Capandtrade 169。 2020 Pearson AddisonWesley Figure shows how a pollution tax equal to the marginal external cost can achieve an efficient oute. At the quantity of the good produced MSC = MSB. The government collect a tax revenue. Negative Externalities: Pollution 169。 2020 Pearson AddisonWesley Negative Externality: Pollution CapandTrade Each firm is assigned a permitted amount of pollution per period and firms trade permits. The market price of a permit confronts polluters with the social marginal cost of their actions and leads to an efficient oute. This method was used successfully to decrease lead pollution in the United States. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Sustainable Use of a Renewable Resource Renewable resource is one that replenishes itself by birth and growth of new members of the population. Sustainable catch is the quantity of fish that can be caught year after year without depleting the stock. If the stock is small, the quantity of new fish born is small, so the sustainable catch is small. If the stock is large, many fish are born but they must to plete for food…. so only a small number survive to reproduce and grow large enough for fishers to catch. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons The Overuse of a Common Resource Figure shows why overfishing occurs. The supply is the marginal private cost curve, MC. The demand is the marginal social benefit curve, MSB. Market equilibrium occurs at 800,000 tons per year and $10 a pound. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Achieving an Efficient Oute It is harder to achieve an efficient use of a mon resource than to define the conditions under which it occurs. The three main methods used to achieve the efficient use of a mon resource are ? Property rights ? Production quotas ? Individual transferable quotas (ITQs). 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Production Quotas By setting a production quota at the efficient quantity, the resource might be used efficiently. Figure shows the profit on the marginal ton of fish. A fisher who cheats will increase his profit. There is an incentive to overfish. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Figure shows the situation with an efficient number of ITQs. The market price of an ITQ increases the marginal social cost to MC + price of ITQ. Users of the resource make MSB equal MC + price of ITQ, and the oute is efficient. 169。 2020 Pearson AddisonWesley 18 MARKETS FOR FACTORS OF PRODUCTION 169。 2020 Pearson AddisonWesley You know that wage rates vary a lot: A server at McDonald’s earns $8 an hour. Demetrio Luna who cleans the windows of Houston’s highrise buildings makes $12 an hour. Richard Seymour, who plays for the New England Patriots, collects a cool $25 million a year. What determines the wages that people earn? The price of oil became a big issue in 2020 as new record highs were set. What determines the prices of the natural resources that we use to produce goods and services? 169。 2020 Pearson AddisonWesley –Market for Labor Services –Labor services are the physical and mental work effort that people supply to produce goods and services. –A labor market is a collection of people and firms who trade labor services. –The price of labor services is the wage rate. –Most labor markets have many buyers and many sellers and are petitive. In these labor markets, the wage rate is determined by supply and demand. The Anatomy of Factor Markets 169。 2020 Pearson AddisonWesley –Markets for Land Services and Natural Resources –Land consists of all the gifts of nature—natural resources. The market for land as a factor of production is the market for the services of land—the use of land. –The price of the services of land is a rental rate. –Nonrenewable natural resources are resources that can be used only once, such as oil, natural gas, and coal. –The prices of nonrenewable natural resources are determined in global modity markets. The Anatomy of Factor Markets 169。 2020 Pearson AddisonWesley –The demand for a factor of production is a derived demand—it is derived from the demand for the goods that it is used to produce. –The quantities of factors of production demanded are a consequence of firms’ output decisions. –A firm hires the quantities of factors of production that maximize its profit. –The value to the firm of hiring one more unit o